How Must Schools Pay Higher Education Emergency Relief Fund Grants To Students?
According to the U.S. Department of Education's (ED's) April 21, 2020 Frequently Asked Questions about the Emergency Financial Aid Grants to Students under Section 18004 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, schools are allowed to deliver the Higher Education Emergency Relief Fund (HEERF) grants to students using checks, electronic funds transfer (EFT) payments, debit cards, and payment apps that adhere to ED's requirements for paying credit balances to students under 34 CFR 668.164(d), (e), and (f). This means a debit card or payment app must comply with Tier 1 and Tier 2 requirements. The HEERF grant cannot be made to students through the use of a credit card that can be used only on campus or in a retail outlet affiliated with the institution.
In any case, the disbursement of the HEERF grant to the student must remain unencumbered by the institution. That is, any outstanding balance (debts, charges, fees, or other amounts owed to the institution) may not be deducted from the HEERF grant, not even with the student's permission.
NASFAA has asked ED if HEERF grants to students can be applied to the student's ledger account and passed through the institution's student information system/student accounts system as long as 100 percent of those funds are delivered to the student and do not pay the student's account balance. While we understand this may be allowable, we cannot say for sure. As soon as we have a definitive answer to this question, we will update this AskRegs Knowledgebase Q&A and post it in our Coronavirus (COVID-19) Web Center and in Today's News.
Note: It is NASFAA's understanding that the above guidance related to credit balances only applies to delivery method and that the 14-day timeframe for delivering Title IV credit balances in 668.164(h) does not apply. Documented cash payments are also acceptable.
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Publication Date: 4/23/2020